Radware Racks Up Record Q4

Switch manufacturer Radware Ltd. (Nasdaq: RDWR) posted its fourth-quarter and annual results today, reporting record quarterly revenues of $19 million, up 27 percent on 2003s fourth quarter, although this was slightly below analyst estimates of $19.3 million (see Radware Announces Record Q4).

Fourth-quarter earnings per share were 22 cents on net income of $4.3 million, up from 13 cents and net income of $2.5 million in the same period last year. This was in line with analyst expectations.

For 2004, total revenue was $68.4 million, up 25 percent on the $54.8 million recorded in 2003, just beating analyst estimates of $68.39 million. Annual earnings per share were 70 cents on net income of $13.8 million, up from 34 cents on $6.4 million for 2003. This was in line with analyst estimates.

Speaking on a crackly conference call earlier today, Radware execs attributed the strong performance to the company’s SynApps technology package, which includes bandwidth management, intrusion prevention, and denial-of-service protection. Users can choose three different levels of SynApps services to run on their Radware devices.

”The SynApps architecture has been the driving force behind our growth,” says Radware CEO Roy Zisapel. In the fourth quarter, 27 percent of units shipped were Synapps enabled, up from 20 percent in the same period a year ago, he adds.Sales of the company’s DefensePro security switch have also helped bolster the company’s financial position, according to Zisapel. DefensePro sales accounted for $2 million of revenue in the fourth quarter, up from $1.1 million in the previous quarter, he says.

This was helped in no small part, by Radware’s success in Asia, where major deals were signed with KT Corp., Chunghwa Telecom Co. Ltd., and Sina (see Radware Racks Up Asian Deals).

However, Zisapel admits that Radware is coming up against some stiff competition in the security space. “F5 Networks Inc. (Nasdaq: FFIV) is growing faster than us,” he says, although he adds that, overall, Radware is gaining market share.

Zisapel was less forthcoming on Radware’s product roadmap. After launching its Application Switch III device last February, the company is now planning a new applicance for 2005. “We will be launching a new hardware platform, but we don’t want to provide any specifics,” he adds.

The market responded positively to the results. In early trading today, Radware shares were up 18 cents (0.74 percent) to $24.35.— James Rogers, Site Editor, Next-Gen Data Center Forum